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Categorize online bank transactions in QuickBooks Online

by Intuit•1377• Updated about 6 hours ago

QuickBooks Online helps you review categories for automatically downloaded transactions and suggests categories based on how you’ve categorized similar transactions in the past.

Note: QuickBooks Online won’t download pending transactions.

For a better experience, open this article in QuickBooks Online. Launch side-by-side view Open this link in a new window

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Step 1: Download the latest bank and credit card transactions

QuickBooks tries to update your bank transactions automatically every 24 hours, but you can manually update them.

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Accounting, then Bank transactions (Take me there).
  2. Select Update. This updates the transactions on all of your accounts.
    Tip: If you see a message about additional authentication, follow the prompts to continue the update.
  3. QuickBooks recognizes common vendors from your bank transactions, and will automatically add new vendors into your account.
  4. Turn this option off if you don’t want new vendors added. In Bank transactions, go to Settings ⚙ and turn off Add new vendors.

If you have trouble downloading your transactions, you can try other options.

Step 2: Review and categorize downloaded transactions

Follow the steps below based on the device you're using.

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Accounting, then Bank transactions (Take me there).
  2. Select the account you want to review.
  3. Select the Pending tab.
  4. QuickBooks sends downloaded transactions to the Pending tab, and suggests categories for each transaction. Review each transaction and do one of the following:
    • If the transaction says Post:
      • Select Post if the suggested category is correct.
      • Or change the category using the dropdown or adding a new one.
    • Select Add to categorize the transactions
    • The transaction already exists in QuickBooks, you may have the option to match or view multiple matches.

Note: You can create a bank rule that automatically categorizes transactions for you.  You can also turn suggestions off if you want to manually categorize your transactions. In Bank transactions, go to Settings ⚙ and uncheck Enable suggested categorization.

Step 3: Choose the right category

Categorize income

Money paid to you. For example, this could be from:

  • Sales
  • Customer payments
  • Refunds
  • Fixed assets sold
  • Bank loans received 
  • Money invested

Categorize expenses

Money paid to others. For example, money spent on:

  • Office Supplies 
  • Meals
  • Payroll 
  • Taxes
  • Fixed assets

Step 4: Other categorization actions

In QuickBooks Online Plus and Advanced, you can track your expenses by item. You can use it if you keep track of your inventory or need item tracking for your job costing reports. Here’s how to turn it on:

  1. Go to Settings Settings gear icon. and select Account and settings.
  2. Select Expenses.
  3. Select the Bills and expenses Image of the edit icon. pencil icon.
  4. Turn on Show items table on expense and purchase forms.
  5. Select Save.

Note: To use the Estimates vs. Actuals report in QuickBooks Online Advanced, you need to track your expenses by item. If you're not sure whether you need to use item tracking, talk to your accountant.

You can record an expense in your bank feed using an account from your chart of accounts, using a product or service, or both. 

Note: If you want to record it with both, you need to split the transaction.

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Accounting, then Bank transactions (Take me there).
  2. In the For review tab, search and select the required expense transaction.
  3. In the Product/service ▼ dropdown, select the product or item from the items list. To use both product/service and account, split the transaction.
  4. Select Post.

You can split transactions between multiple categories for better tracking.

  1. Go to All apps A bunch of numbers and letters on a tile wall., then Accounting, then Bank transactions (Take me there).
  2. In the For review tab, select the transaction you want to split.
    Note: If the option is Match, change it to Categorize.
  3. Select Split.
  4. From Category▼, select the categories you want to split the transaction into.
  5. Enter an amount for each split so the Difference shows $0.
  6. Add other information for the transaction, as needed.
  7. Select Split and add.
  • The check image disconnects when checks are matched to a bill and converted into a bill payment.
  • If your connected bank transactions don’t have check images automatically attached, your bank is not supported. However, it may be supported at a later date as we work to partner with more financial institutions.

Result

After completing these steps, your bank transactions will be categorized correctly in QuickBooks Online. This helps maintain accurate financial records and ensures your reports reflect real activity.

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